« previous next »

Author Question: Why is indexing not commonly adopted in spite of the fact that it eliminates most of the wealth ... (Read 30 times)

cherise1989

  • Hero Member
  • *****
  • Posts: 555
on: Jun 30, 2018
Why is indexing not commonly adopted in spite of the fact that it eliminates most of the wealth transfers associated with unexpected inflation?

Question 2

Because of the large amounts of resources devoted to understanding the nature of financial crises, researchers now feel comfortable making forecasts and do not expect to have any more surprises in the future.
 a. True
  b. False
  Indicate whether the statement is true or false


peilian

  • Sr. Member
  • ****
  • Posts: 316
Reply #1 on: Jun 30, 2018
Answer to Question 1

Indexing is not frequently used because it can always worsen inflation. As prices go up, wages and certain other contractual obligations also automatically increase and this immediate and comprehensive reaction to price increases, leads to greater inflationary pressures. In addition, indexing does not allow relative prices to reflect change in relative scarcity.

Answer to Question 2

False


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Gomphidae is an Odonata family that contains about 90 genera and 900 species. They are commonly refe Gomphidae is an Odonata family that contains about 90 genera and 900 species. They are commonly refe
In the summer of 1793, a yellow fever epidemic struck Philadelphia, killing nearly 4,000. Tens of th In the summer of 1793, a yellow fever epidemic struck Philadelphia, killing nearly 4,000. Tens of th
A William Jennings Bryan poster alludes to religion: “no crown of thorns” and no “cross of gold.” Br A William Jennings Bryan poster alludes to religion: “no crown of thorns” and no “cross of gold.” Br
Commonly Used Pharmacology Abbreviations Commonly Used Pharmacology Abbreviations
Commonly Used Pharmacology Abbreviations Commonly Used Pharmacology Abbreviations
The Zones of Injury Commonly Caused by a Thermal Burn The Zones of Injury Commonly Caused by a Thermal Burn
Video: Proteins Defined, Hierarchy & Composition of Cells

For a complete list of videos, visit our video library